Gambling giant Tabcorp has been hit with a first strike from shareholders, with 40 per cent rejecting its remuneration report despite late tweaks to proposed management bonuses.
Chairman Paula Dwyer had earlier told Wednesday’s annual general meeting in Brisbane she expected a “significant number” of votes against the report, despite moves to soothe angst by altering bonuses in store for Tabcorp executives following December’s $11 billion merger with Tatts.
Proxy advisers had recommended Tabcorp shareholders vote against the remuneration report and 40.4 per cent duly rejected it, resulting in a first strike.
If more than 25 per cent of shareholders reject the remuneration report at next year’s Tabcorp AGM, it would constitute a second strike and trigger a forced spill.
During Ms Dwyer’s earlier speech, she claimed the bonuses were in recognition of “extraordinary efforts” to complete a “complex transaction” that ultimately took 14 months, but acknowledged shareholders wanted the rewards to be conditional on the success of the merger.
She said the merger completion awards were paid partly in cash and partly in restricted shares, subject to a two-year service condition, but added that the board acknowledged shareholders concerns.
“(We now) intend to apply a synergy-based performance measure and to extend the vesting period for the restricted shares granted to key management personnel under the merger completion award,” she said.
“The new performance measure will be based on the achievement of synergies and benefits from the combination at the end of FY21, and the vesting period will be extended from two years to three and a half years.
In other news, Steven Gregg was re-elected as a Tabcorp director despite 40.14 people voting against his appointment, while Harry Boon was also elected a director.
Shares in Tabcorp were 12 cents, or 2.69 per cent, higher at $4.765 at 1320 AEDT.
Tabcorp swung to a net profit of $28.7 million in 2017/18 following its merger with Tatts Group, with digital sales and the FIFA World Cup helping to lift the gaming giant’s reach and revenue.